Anyone who has imported products from China can attest that the planning process of most manufacturers is not exactly under control. The sad reality is that buyers are usually happy when a shipment is "only" 10 days after the promised date.
But where does this lack of precision is? Is it the result of over-enthusiastic salespeople? Not only.
In this article I listed the 7 most serious issues that I have noticed in many Chinese factories.
1. The lack of stability
there are always emergencies - customers who shout louder than the other, that is. So the boss puts his orders at the top of the priority list. As a result, the production people are constantly telling them to "streamline it" and then "oh really this is even more urgent," and so on.
Why is it a problem? Since it causes a serious loss of production efficiency.
A long term planning, by contrast, allows the factory to minimize the number of changes to keep staff fully utilized, to minimize confusion, etc. In the end, this means lower costs.
2. No standard timing for recurring operations
how can a serious manufacturer quote a new product? In reviewing the cost of the BOM, and estimating the time spent on one piece each process. This process can be relatively accurately by monitoring the time it takes to make samples and by applying some rules of thumb.
Once production runs regularly, it is also good to have an industrial engineer perform time studies, simple movement. The main goal should not be to refine the number of workers should get paid, but to allow finer planning process. (And also allows the department to calculate production efficiency.)
But what about the vast majority of Chinese factories that make the effort to provide the processing times in a scientific way? They are easily 20% discount on any given operation - and sometimes more than 100% off! (Ever wonder why prices go up so often after it has begun production?)
3. Excessive batch sizes
Owners of Chinese factories are obsessed with paying low price all they can to components, and often are pushed to buy large quantities at a time - sometimes we see 6 or 8 months of inventory for certain components or accessories.
Unfortunately, these large lots often take longer to do. So a couple of days (or weeks) are lost here. And then what happens internally after the components are in stock? The factory is to gain efficiency in production, doing lots are larger than the orders on hand. Same logic.
Not only saves money, but means the production takes even longer.
4. Without understanding the whole system
If you want to see if a production manager is smart, ask him if he has identified bottlenecks (there is always at least one), and what actions it has taken to increase its capacity.
Similarly, production managers usually have no knowledge of the effects of WIP (work in process) inventory on the production schedule. A mathematical relationship dictates most WIP means longer delivery times.
Finally, sometimes there is no buffer. Many factories added 4-8 days in the planning, because they know that "shit happens", but some manufacturers unsophisticated even think about this.
5. Lack of monitoring
Good factories operates, at least, a weekly review of all orders for delivery in the coming days. The idea is to review the situation and take appropriate action if delays are likely. But many factories have no regular meeting. That's a mistake.
In fact, I've found that people love meetings. Meetings called unstructured ad hoc to discuss a hot topic, that is. But regular meetings to discuss the situation on the database? That's another story. It is often necessary for the CEO to force your personal schedule.
6. Sequential preparation by different individuals / departments
I recently reviewed the planning process of a factory have 7 days from receipt of order and confirmation of the order by a customer providers. The sales team needs a day to prepare the information in the correct format, then planning and buying the equipment needed several days to prepare the list of materials, check the stock, inform providers, etc.
Not only their internal processes need a strong dose of simplification and standardization, but each service waits until the previous one has finished his work. Part of concurrent processing solution is as shown below.
7. Neither coordination with the director of human resources
If orders to collect significantly, it is good to start hiring more production operators a few weeks before. This is common sense, but common sense, apparently not found in many organizations. The HR manager should receive a summary of upcoming orders at least once a week to adjust the template.
But where does this lack of precision is? Is it the result of over-enthusiastic salespeople? Not only.
In this article I listed the 7 most serious issues that I have noticed in many Chinese factories.
1. The lack of stability
there are always emergencies - customers who shout louder than the other, that is. So the boss puts his orders at the top of the priority list. As a result, the production people are constantly telling them to "streamline it" and then "oh really this is even more urgent," and so on.
Why is it a problem? Since it causes a serious loss of production efficiency.
A long term planning, by contrast, allows the factory to minimize the number of changes to keep staff fully utilized, to minimize confusion, etc. In the end, this means lower costs.
2. No standard timing for recurring operations
how can a serious manufacturer quote a new product? In reviewing the cost of the BOM, and estimating the time spent on one piece each process. This process can be relatively accurately by monitoring the time it takes to make samples and by applying some rules of thumb.
Once production runs regularly, it is also good to have an industrial engineer perform time studies, simple movement. The main goal should not be to refine the number of workers should get paid, but to allow finer planning process. (And also allows the department to calculate production efficiency.)
But what about the vast majority of Chinese factories that make the effort to provide the processing times in a scientific way? They are easily 20% discount on any given operation - and sometimes more than 100% off! (Ever wonder why prices go up so often after it has begun production?)
3. Excessive batch sizes
Owners of Chinese factories are obsessed with paying low price all they can to components, and often are pushed to buy large quantities at a time - sometimes we see 6 or 8 months of inventory for certain components or accessories.
Unfortunately, these large lots often take longer to do. So a couple of days (or weeks) are lost here. And then what happens internally after the components are in stock? The factory is to gain efficiency in production, doing lots are larger than the orders on hand. Same logic.
Not only saves money, but means the production takes even longer.
4. Without understanding the whole system
If you want to see if a production manager is smart, ask him if he has identified bottlenecks (there is always at least one), and what actions it has taken to increase its capacity.
Similarly, production managers usually have no knowledge of the effects of WIP (work in process) inventory on the production schedule. A mathematical relationship dictates most WIP means longer delivery times.
Finally, sometimes there is no buffer. Many factories added 4-8 days in the planning, because they know that "shit happens", but some manufacturers unsophisticated even think about this.
5. Lack of monitoring
Good factories operates, at least, a weekly review of all orders for delivery in the coming days. The idea is to review the situation and take appropriate action if delays are likely. But many factories have no regular meeting. That's a mistake.
In fact, I've found that people love meetings. Meetings called unstructured ad hoc to discuss a hot topic, that is. But regular meetings to discuss the situation on the database? That's another story. It is often necessary for the CEO to force your personal schedule.
6. Sequential preparation by different individuals / departments
I recently reviewed the planning process of a factory have 7 days from receipt of order and confirmation of the order by a customer providers. The sales team needs a day to prepare the information in the correct format, then planning and buying the equipment needed several days to prepare the list of materials, check the stock, inform providers, etc.
Not only their internal processes need a strong dose of simplification and standardization, but each service waits until the previous one has finished his work. Part of concurrent processing solution is as shown below.
7. Neither coordination with the director of human resources
If orders to collect significantly, it is good to start hiring more production operators a few weeks before. This is common sense, but common sense, apparently not found in many organizations. The HR manager should receive a summary of upcoming orders at least once a week to adjust the template.
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